Nov 27, 2011

Meaning of decentralization authority

The concept of decentralization is related to the concept of delegation of authority. The decentralization is the fundamental aspects of delegation to the extent that authority in not centralized, it is delegated. Thus, both the centralization and decentralization represent the parties distribution of authority among managers at different levels.

Centralization is the degree to which authority and responsibility are retained by higher level manager in an organization rather than being delegated. According to Louis A. Allen, " centralization is the system and consistent reservation of authority at central points within the organization." In such pattern, either the higher level manager reserves the work or if he/she delegates the work, the authority is reserved. Thus majority of the decisions are made by top level management rather than by the actual performed or the job.

Decentralztion of authority is, no dubt, opposite to centralization. It is the systemic dispersal of authority at all level of management for taking decisions and action appropriate at the respective levels. Decentralization is tyeh outcome of delegation of authority. Some poplar definitions of decentralization are given below.

According to Louis A. Allen, "decentralization refers to the systematic effort to delegate to the lower level all authority except that which can be exercised at central points. Decentralization is concerned with the placement of authority with responsibility."

According to Joseph L. massie," Decentralization as an organization concept refers to the pushing decision making to the lower level of the organization."

Decentralization of authority is a management philosophy through which managers at middle and lower level are given the authority to take decisions and actions on matters realizing to their respective area of work. The top level management retains the authority for taking static decisions and formulating policies for the organizations as a whole. Top level management also retains the authority for overall coordination and controlling of the organization. Thus, decentralization is much more than a mere transfer of authority to lower level.